Posted by Art_MD on 6/27/05 1:37pm
Msg #48181

PMI - personal question

I am buying my mother in laws house.
Loan will be for 75% of the appraised value.
Will be doing $50K of repairs/upgrade so want to minimize cash outlay, so will be doing a 90% loan.
LO says I have to have PMI since it is required when loan to value ration is >80%. They use lower of sell price or appraised value in determining ratio. WHAT ???
Also, I said, what if I get it reappraised 1 month after closing. Can I drop PMI ??? Was told by LO have to have PMI for minimum of 2 years. WHAT ???

If anyone can clarify, I'd appreciate it. Also, where can I go to find out about PMI and the law?

Art

Reply by AngelinaAZ on 6/27/05 2:01pm
Msg #48192

In my state... once the ratio is down under 80% you can drop the PMI. I have never heard of two years.

Reply by Ellen/ca on 6/27/05 2:15pm
Msg #48196

The criteria for removing Pmi is usually spelled out in your loan docs . It will tell you how long you must keep the PMI. You usually have to use lender's appraiser who will most likely be conservative on the value. You have to pay for the appraisal and I have heard of many appraisals not coming in at the amt needed to remove PMI. You must have no late payments. Sometimes. too, they want more than 80% loan to value.

Reply by Art_MD on 6/27/05 2:29pm
Msg #48208

Their apppraiser's value still has a loan to value of <80%. Its at 76%. In 6 months I will have put $60K into upgrades, roof, siding etc. - all items which pulled down the appraised value (so stated in the appraisal report).

Any federal laws re: PMI??

Art

Reply by BrendaTX on 6/27/05 6:57pm
Msg #48277

Why do I think maybe you can find it at www.hud.gov? It may be there that I've read something about it. I'm sure I have seen similar info there. Try that, or try finance laws...insurance laws...HTH

Brenda

Reply by Ellen?CA on 6/27/05 2:21pm
Msg #48201

Correction: more equity than 20%. There has been some crackdown on that, though. I would first check what your loan docs say.

Reply by Julie-MI on 6/27/05 2:27pm
Msg #48205

Thus a piggy back

This is a senario for a piggy back. You go 80 percent on the first and do a heloc or fixed second for the second. This way you don't have to to PMI at all.

Most opt for the HELOC as the interest rate is lower than a fixed second.

Reply by Julie-MI on 6/27/05 2:29pm
Msg #48206

Possible correction

If the property is investment, not a primary residence you may not be able to do the above.

Reply by Art_MD on 6/27/05 2:32pm
Msg #48210

Re: Thus a piggy back

Problem with piggy back is the rate on the HELOC or second is higher than the first.

Art

Reply by Julie-MI on 6/27/05 2:40pm
Msg #48211

Re: Thus a piggy back

True,

However, mortgage interest is tax deductable and PMI is not.

Reply by anon FL on 6/27/05 2:45pm
Msg #48214

RESPA I think

covers PMI (or maybe under a seperate Act, including the ability of the lender to ask for it and the ability to get rid of it. I think the rules provide for the ability of a lender to require for a min. period, but the lender can waive if if wants (an Internet search of "RESPA PMI" should get results.

Reply by LAG-Fl on 6/27/05 3:55pm
Msg #48233

Re: RESPA I think

Home values in FLorida are going through the roof. I just removed my PMI. It did have the two year clause in my mortgage and I did need an appraisel. I had to pay for it. But it took 100.00 off of my mortgage so it helped me. It took over two months to get this all done with the mortgage company and alot of calling to them. Make sure you get a copy of appraisel for your own records. You paid for it.

Reply by PA Notary II on 6/27/05 6:16pm
Msg #48265

Art: I don't know what your personal situation is like, but I would just go with the best deal I could get, then, after the fact I would get a HELOC on my own home to pay off the in-law deal. Of course that is provided you have the equity. Even if you didn't, I would do the same thing and reduce the balance to 60 or 70% of value to get the PMI removed.

Reply by ItsMe123 on 6/27/05 9:19pm
Msg #48332

Tell the LO to place the loan Wilmington and get a new LO

they have the best rates with no PMI. They do have lower PP with less time so don't go for the crap of him trying to sell you a 5 year 5% PP---their investors will do lowers. I don't get why the recent improvements are slamming the appraisal. If you want send me a copy of the apprasial. Personlaaly if this joker has led this far just so he can make his 5 on the back (these points on Govie loans aren't disclosed) I would dump him. He wants to place this loan in a govie program for max cash on a small loan amount.

Reply by sue on 6/27/05 8:15pm
Msg #48310

are you saying you're getting cash back at closing on a purchase?